Walmart : Second Quarter 2025 Presentation

Published: 2024-08-15 07:16:09 ET WMT

Financial presentation

to accompany management commentary

FY25 Q2

Guidance

The following guidance reflects the Company's expectations for the third quarter and fiscal year 2025 and is provided on a non-GAAP basis as the Company cannot predict certain elements that are included in reported GAAP results, such as the changes in fair value of the Company's equity and other investments. Growth rates reflect an adjusted basis for prior year results.

Third Quarter

The Company's fiscal third quarter guidance is based on the following FY24 Q3 figures: Net Sales: $159.4 billion,

operating income: $6.2 billion, and adjusted EPS1: $0.51. Guidance contemplates the impact of timing of festive events in the Company's international segment and the timing of planned expenses.

Metric

Consolidated net sales (cc)

Increase 3.25% to 4.25%

Consolidated operating income (cc)

Increase 3.0% to 4.5%

Adjusted EPS

$0.51 to $0.52

Fiscal Year 2025

The Company's fiscal year guidance is based on the following FY24 figures: Net sales: $642.6 billion, adjusted

operating income1: $27.1 billion, and adjusted EPS1: $2.22. The Company's full year guidance assumes a generally stable consumer and continued pressure from its mix of products and formats globally.

Metric

FY 2025 (updated)

FY 2025 (original)

Consolidated net sales (cc)

Increase 3.75% to 4.75%

Increase 3.0% to 4.0%

Consolidated adj. operating income (cc)

Increase 6.5% to 8.0%

Increase 4.0% to 6.0%

Interest, net

Increase approximately $100M

Increase approximately $100M to $200M

Effective tax rate

Lower-end of original guidance

Approximately 25.0% to 26.0%

Non-controlling interest

Unchanged from original guidance

Relatively flat

Adjusted EPS

$2.35 to $2.43

$2.23 to $2.37

Capital expenditures

Unchanged from original guidance

Approximately 3.0% to 3.5% of net sales

1For relevant reconciliations, see Q3 FY24 and Q4 FY24 earnings releases furnished on Form 8-K on November 16, 2023 and February 20, 2024, respectively. Per share amounts have been retroactively adjusted to reflect the February 23, 2024 stock split.

cc = constant currency

Total revenues

Total revenues (cc)1 $169.7 billion, up +5.0%

Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding.

$173.4

$169.3

$161.6

$160.8

$161.5

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Y/Y Change

+5.7%

+5.2%

+5.7%

+6.0%

+4.8%

Y/Y Change (cc)1

+5.4%

+4.3%

+4.9%

+5.8%

+5.0%

1See additional information at the end of this presentation regarding non-GAAP financial measures.

Gross profit rate

Gross profit rate +43bps to 24.4%

24.4%

24.0%

24.1%

23.3%

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Y/Y Change

+50bps

+32bps

+39bps

+42bps

+43bps

Operating expenses as a percentage of net sales

Adjusted operating expenses as a percentage of net sales1, +41bps to 20.6%

Operating expenses as a percentage

Adjusted operating expenses as a

of net sales

percentage of net sales1

21.0%

20.8%

20.6%

20.3%

20.2%

20.0%

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Y/Y Change

+33bps

-182bps

-36bps

+40bps

+35bps

Y/Y Change

+27bps

+37bps

+16bps

+24bps

+41bps

1See additional information at the end of this presentation regarding non-GAAP financial measures.

Operating income

Adjusted operating income1 of $7.9 billion, up 7.2%

Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding.

Operating income

Adjusted operating income1

$7.9

• Adjusted operating income (cc)1 up

$7.3

$7.4

$7.3

7.4% relative to 4.9% growth in net

$6.8

$7.1

sales (cc)1

$6.2

• Reflects strong sales growth, higher

gross margins and membership

income, partially offset by expense

deleverage; also benefited from

reduced eCommerce losses

• Q2 FY25 net income margin

decreased ~220bps and adjusted

EBITDA margin1 increased ~20bps

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Y/Y Change

+6.7%

+130.1%

+30.4%

+9.6%

+8.5%

Y/Y Change

+8.1%

+3.0%

+13.2%

+13.7%

+7.2%

Y/Y Change (cc)1

+4.9%

+124.0%

+27.8%

+8.8%

Y/Y Change (cc)1

+6.3%

+0.3%

+10.9%

+12.9%

+7.4%

1See additional information at the end of this presentation regarding non-GAAP financial measures.

EPS

Adjusted EPS2 of $0.67, up 9.8%

EPS1

Adjusted EPS1,2

$0.97

$0.68

$0.63

$0.61

$0.67

$0.56

$0.60

$0.51

$0.06

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

$0.59

$0.50

$0.57

$0.49

$0.61

Y/Y Change

+54.0%

-11.7%

+200.0%

-42.3%

Y/Y Change

+3.4%

+2.0%

+5.3%

+22.4%

+9.8%

1Comparison period per-share amounts and percentage changes have been retroactively adjusted to reflect the February 23, 2024 stock split. 2See additional information at the end of this presentation regarding non-GAAP financial measures.

NM = not meaningful

Cash flow

Amounts in billions, except as noted. Dollar changes may not recalculate due to rounding.

Operating cash flow

$35.7

$18.2 $19.0

$16.4

$4.2

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

YTD

$9.2

$15.7

$28.8

$4.6

$18.2

Y/Y Change

+97.0%

+21.1%

+23.9%

-8.3%

-10.1%

Y/Y Change

1See additional information at the end of this presentation regarding non-GAAP financial measures. NM = not meaningful

Free cash flow1

$15.1

$9.0

$5.9

$4.3

$(0.4)

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

YTD

$1.7

$3.6

$12.0

$0.2

$9.0

+414.0%

+19.4%

+26.2%

-34.9%

Returns to shareholders

Dividends and share repurchases

Amounts in billions, except as noted. Dollar amounts may not recalculate due to rounding.

$0.5

$0.1

$1.5

$1.1

$1.0

$1.7

$1.5

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Returns to

Dividends

Share repurchases

$2.0

$1.6

$3.0

$2.7

shareholders

Returns

Return on assets (ROA)

Return on investment (ROI)1

7.9%

15.0%

15.1%

6.5%

6.6%

6.4%

14.1%

5.6%

12.8%

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Q2 FY24

Q3 FY24

Q4 FY24

Q1 FY25

Q2 FY25

Y/Y Change

-20bps

+280bps

+200bps

+340bps

+80bps

Y/Y Change

-100bps

+130bps

+230bps

1See additional information at the end of this presentation regarding non-GAAP financial measures.

Disclaimer

Walmart Inc. published this content on 15 August 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2024 11:15:03 UTC.